On January 23, the World Health Organization issued an “urgent call to action” on “substandard counterfeit medical products.” In her seven countries in Africa and Asia, parents were buying over-the-counter cough syrups for sick children that were found to be contaminated with diethylene glycol and ethylene glycol. The first is industrial solvent and the second is antifreeze. Both are poisonous, but have a sweet taste.
The WHO said contaminated cough syrup was “implicated in more than 300 deaths….mostly children under the age of five.” These deaths were from Gambia, Indonesia and Uzbekistan, but India and syrups reportedly made in Indonesia have been found in other countries as well.
The story has the nightmare quality of a repeating history. As Elsevier’s website ScienceDirect explains:
Sulfa was the first great antibiotic and precursor to penicillin. In 1937, its sale in the United States was completely unregulated. Tennessee manufacturer SE Massengill Co. recommends selling it in a sweetened elixir.
“Massengil’s chief chemist formulated a solution of 10% sulfanilamide, 72% diethylene glycol and 16% water,” Scientist said, adding: The value of banknotes steadily declined as they moved away from their banks of origin.
Since the value of banknotes fluctuates, accepting a single payment is an investment and there is no guarantee that you will get the full value. If the issuing bank goes bankrupt, you get nothing. Sound familiar?
Rumors of embezzlement by bank management can lead to a backlash. Once the run began, depositors had to drop everything and fight on the front lines. Just like what happened with FTX.
Those of us who have stayed away from crypto markets can view such episodes as archaic history. I was. The Federal Deposit Insurance has entrusted brick-and-mortar banking to old movies like “It’s a Wonderful Life.” We are lucky to live in such stable times.
However, cryptocurrencies have given us an alternative financial market that exists outside the overarching regulatory framework. There are a lot of completely new things about cryptocurrencies. For example, the endorsement of Larry David, or the colossal waste of computing power. But getting rid of regulation is a return to the past.
An unregulated financial market is like an unregulated market for over-the-counter drugs. Both are reminders of why we have and need regulations.
Joel Jacobsen is a writer who retired in 2015 after 29 years in the legal profession. If you have a topic you’d like us to cover in a future column, let us know at [email protected].
